The S&P 500 hit an all-time high Oct. 6 before pulling back roughly 2 percent. Tech stocks' massive artificial intelligence capital spending and rising bond yields have triggered the familiar investor urge to wait for a bigger dip before buying.
Charles Schwab's research team tested this instinct against reality. They modeled 20 years of S&P 500 returns (2005-2024) under two scenarios: one investor deployed $2,000 annually on the single lowest closing day each year (perfect timing), the other on the first trading day of each year (time in market).
Perfect timing produced $186,077. First-day investing produced $170,555. The gap: 8.3 percent.
For investors tempted by current volatility, the math is stark. No one times the market consistently. Schwab's data says you do not need to. A disciplined annual buy schedule on a fixed calendar date compounds into near-optimal returns—without requiring superhuman foresight or market-beating skill. The takeaway for equity allocators: stay the course.
